Whether you have a good customers who have encountered financial difficulties or client invoices that are substantially delinquent, unpaid accounts can damage your cash flow and your bottom line.
Bills that go unpaid due to customers
who simply ignore invoices are unfortunate, common occurrences in every business’s accounts receivable department, but how do you know when it is time to take legal action to recoup your losses? Contact a debt collection attorney in Arkansas when you come to any of these points in you collection attempts:
Is the Debt Large Enough?
While you can legally sue for most amounts, the actual amount owed should be worth the time and cost of hiring a debt collection attorney. Some attorney fees are set up to be charged only upon collection of the unpaid customer accounts. The debt should be a significant enough amount to make a difference in your account receivable totals. Suing a client for a $100 invoice is better left to small claims court, and is likely not cost-effective nor worth the legal battle. Generally, $1,000 is the minimum amount to consider taking the debt to court. Note that this figure can be due from one overdue account or include a collective total of several outstanding accounts.
Have You Made Requests and Been Ignored?
Have you already tried to collect the unpaid amount by sending past due invoices and demand letters? If your business has made an effort to collect and are either being ignored by the customer or the client makes arrangements, but never pays, you should consider proceeding with a lawsuit. Your debt collection attorney can take control of all unpaid accounts and the collections process through the legal system. This will alleviate stress on your internal accounting team and allow them to focus on the customers that pay on time and in full.
Do You Have Multiple Accounts in Collections?
While it is not required to have multiple delinquent accounts in order to hire a debt collection attorney, having many unpaid accounts could be a sign of trouble. When the amount of past due invoices piles up in your accounting office, it is recommended that you hire a debt collection attorney to not only manage collection of these debts, but to correct possible problems within the department.
If you have contracts with your unpaying clients, have an attorney review these contracts to verify you are not inadvertently creating payment issues with your terms. Thereby, hiring a debt collection attorney to manage unpaid accounts can allow your staff the time and resources to examine current processes and make changes where necessary.
If proceeding with a suit for debt recovery, it is essential that you hire an attorney experienced in debt collection. There are complex procedures and privacy laws surrounding debt collection in Arkansas. An attorney skilled in this area is accustomed to navigating the system and understands the best way to recoup your funds from delinquent clients.
If your business is overwhelmed by high outstanding client balances, or multiple customers who refuse to pay invoices on time or at all, we are here to help. Contact The McHughes Law Firm to learn more about your debt collection options in Arkansas by calling 800.441.1935.
